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Cash flow is a universal concern among SME owners. When an unfortunate event hits, the associated financial and asset losses will not only add to their woes but may also force them out of business.

That’s why every SME needs to invest in a safety net and be adequately prepared for risks that can threaten the business.


Besides taking preventive steps , it is critical to have the right protection to safeguard against unforeseen losses and quickly get your operations back to business-as-usual after a disaster. Understanding your risks and the protection you need is key.


Fire, Flood and Water Damage

With fire being one of the most significant risks for Malaysian SMEs, Fire Insurance is essential for protecting your business property against loss or damage by fire or lightning.


Beyond that, you should also consider including flood cover as part of your Fire Insurance policy as flood has become more common in major cities such as Kuala Lumpur, Penang and Johor Bahru in recent years, putting more businesses at risk. The severity of the ‘once in 100 years’ flood also serves as a painful reminder of the devastating damages flood can cause.


Similarly, you would want to protect your business against non-weather related-water damages from burst pipes and sprinkler leakage, for instance.


Examples of other threats and expenses that can be covered under Fire Insurance*:

  • bush or Lalang fire
  • explosion and combustion
  • damage caused by falling trees
  • cost of cleaning up and removing debris


By insuring against these events that can cause extensive damage, it aids business recovery and prevents substantial cash outflow from repairing and rebuilding your business property and assets.


Consequential Loss (also known as business interruption)

Among other inconveniences, disruptions of all types can lead to income losses for businesses. Having coverage for consequential losses means that when your operation is affected by incidents such as fire and flood, the following losses or additional operating expenses may be covered:

  • loss of profits/revenue and rental
  • costs for setting up temporary offices
  • employees’ overtime wages
  • purchase of replacement equipment


Not only will this absorb some of the financial losses, it also provides supplemental income that can help your business return to operating at the same level before your loss occurred.


Public and Employer’s Liability

Adverse events can happen not just to the business, but also to customers, employees, and others.


Another risk that should be on your radar is the accidental bodily injury or property damage that your business could inflict on a third party (e.g., a customer or vendor) or a staff. For example, a customer who is injured after falling on slippery floors could file a medical compensation claim against the restaurant. Or an employee could sue over health issues that arise from over-exposure to hazardous chemicals at work.


As a policyowner of public and employer’s liability insurances, you’ll be covered when you are legally responsible for the compensation of the injury and/or damage caused, as well as any cost related to the claim filed against your company.


You can never truly plan for the unexpected. But investing in business insurance can provide a cushion to soften the impact disasters have on your cash flow, operations and business continuity.


Choosing the appropriate coverages can be daunting, especially when you require protection against different exposures. In addition, you are likely to want a fuss-free and cost-effective solution. That’s why you need a solution that gives you the flexibility to choose the type of protection you need and the level of investment you wish to make.


Find out how to choose the best SME insurance solution and answers to other questions you may have about protecting the business you have worked so hard to build.


*some of these are complimentary, while others are additional coverages that can be included as part of your fire insurance policy at a small cost

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Both English & Bahasa Melayu language versions are considered to be equally authentic. In the event of any discrepancy between the two aforementioned versions, the English version shall prevail in determining the spirit, intent, and meaning of this publication.

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